Corona Pandemic and Stock Market Behaviour: Empirical Insights from Selected Asian Countries

Abstract

On the onset of the year 2020, the unprecedented outbreak of novel coronavirus, initially as a human health epidemic and later as a global pandemic, has wobbled the economies of affected countries across the globe. The consequential unexpected occurrences of supply- and demand-side shocks forced the economies to trim down their growth prospects. The interplay of these shocks has generated spirals of downturns in all major economic sectors, including the financial sector in affected countries. Specifically, the stock markets immediately nosedived, following the outbreak of the global spread of coronavirus disease 2019 (COVID-19). Thus, we examine the behaviour of the selected Asian stock markets amid the huge uncertainties of the corona pandemic and find the occurrences of volatility clustering in these markets. Such volatility clustering primarily occurred, owing to the pessimistic and panic sentiments of investors, and the increase in the number of COVID-19 confirmed cases, changes in oil prices, and exchange rates were found to be significant in channelizing the fears and uncertainties of coronavirus pandemic to cause unexpected nosedives in Asian stock markets.

Spatial tale of G-7 and BRICS stock markets during COVID-19: An event study

“…Topcu and Gulal (2020) studied the impact of COVID-19 on emerging markets and found that Asian stock markets were more severely affected than European emerging markets. COVID-19 appalled the stock markets significantly compared to economic events such as GST implementation and demonetization in India (Mishra et al, 2020). All the above significant findings pave the way to further introspection of the methods that can be adopted for measuring and comparing the effect of COVID-19 on stock markets.…”

“…Traces from the literature provide insight into an event study being majorly used to capture the im-pact of unsystematic risk and its deep-down effect on the individual stocks and industries Lyócsa & Molnár, 2020;Mishra et al, 2020). A sufficient count of previous studies focusing on the cross-country comparison of stock markets' reactions to COVID-19 (David et al, 2021;Mishra & Mishra, 2020;Topcu & Gulal, 2020) imitates the appropriateness of the event study method. Deficient documentation in the research wits shoves the path to measure and analyze the impact of macro events such as COVID-19 on the G-7 and BRICS nations, which propounds the idea of this study.…”

“…The key question is to assess and quantify the impact of the outbreak of COVID-19 on the global stock markets. Keeping the previous literature on measuring the short-term impact of COVID-19 on stock markets (Liu et al, 2020;Mishra & Mishra, 2020;Singh et al, 2020), the study considers the stock markets of G-7 and BRICS as the focus of investigation. The group of G-7 contributes more than 50% of the world's GDP, whereas BRICS accounts for more than 50% of growth in the world GDP.…”

“…BHAR in the event window(15)(16)(17)(18)(19)(20)(21)(22)(23)(24)(25)(26)(27)(28)(29) for G-7 and BRICS…”

Examining the Asymmetric Impact of COVID-19 Pandemic and Global Financial Crisis on Dow Jones and Oil Price Shock

“…The study of [13] stated that gold is a substantial safe haven against oil prices. Moreover, [14] stated that COVID-19 cases and oil prices changes directly affect the Asian stock markets. Consequently, it becomes essential to evaluate the impact of COVID-19 news on the variance and mean returns of WTI.…”